CLTA Mechanic's Lien Coverage Endorsement Guideline 101.11
Explanation:Provides the lender with insurance concerning the priority of the lender's lien when the loan is made during the course of construction or construction has been completed on only a portion of the parcels described in the policy but no notice of completion has been filed.
(1) If the endorsement is to be issued in California, a statutory bond which has been approved by the appropriate Stewart Title Guaranty underwriting personnel should be recorded under the provisions of the Civil Code to cover the possibility of any statutory lien for labor or material arising out of the work of improvement or materials furnished subsequent to the date the bond is recorded;
(2) An indemnity which has been approved by the appropriate Stewart Title Guaranty underwriting personnel is obtained covering all work of improvement now in progress, recently completed or to be completed after the deed of trust or mortgage is recorded;
(3) The liability set out in the endorsement must be limited to a specified sum. The sum set out in the endorsement should be the amount of money advanced by the lender to cover the work of improvement done only on the parcel to be covered. The amount of liability shown in this endorsement should never exceed the amount of insurance shown in the policy; and
(4) Inspection of the property is required.
(5) This guideline is for California property. The appropriate Stewart Title Guaranty underwriting personnel must be contacted prior to issuance in other states.
The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.
Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.
This guideline applies to the following form(s):